Economic viability of a biofactory for controlling the root spittlebug in a sugar and ethanol plant

John Adalberto Palucci and Gustavo Carvalho Moreira

Revista IPecege, 2015, vol. 1, issue 3/4

Abstract: The sugarcane root spittlebug, Mahanarva fimbriolata, has become a serious problem in some regions of the state of São Paulo, such as Ribeirão Preto, SP, where most sugarcane is already harvested mechanically, without burning. Without burning the straw, this material accumulates in the soil, increasing humidity and thus facilitating the growth and spread of the sugarcane root spittlebug. Considering that the new environmental legislation in São Paulo will prohibit sugarcane burning, a significant increase in the M. fimbriolata population is expected, causing serious losses for mills and suppliers, in addition to increased costs for controlling this pest. Therefore, this study aimed to conduct a cost analysis for the implementation of a Metarizium anisopliae biofactory in a sugar and ethanol mill for a feasibility study, using the cash flow analysis method and indicators such as NPV, IRR, and Payback. The financial indicators were an NPV of R$ 66,404.28, an IRR of 15.49%, and a payback period of 4.21 years. However, when analyzing the project's sensitivities, we find that in the short term, the project is unfeasible.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2015
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